Retailers Rediscover ‘Just-in-Time’ Inventory After Years of Pileups

Retailers are reportedly embracing “just-in-time” inventory management once more after years of excess stock.

As The Wall Street Journal (WSJ) reported Wednesday (Jan. 24), merchants have sold off the goods that collected in stores and warehouses since 2022, and have shifted their focus to restocking instead of holding onto product in case of supply chain issues, the so-called “just-in-case” strategy.

Among the retailers practicing just-in-time inventory management is Tailored Brands, parent company of Men’s Wearhouse and Jos. A. Bank.

“We are bringing in the inventory we need to support our sales plan and have visibility out to 180 days to adjust up or down based on the demand signals we are receiving,” Jamie Bragg, the company’s supply chain chief, told the WSJ.

Tailored Brands’ ability to respond to changes in demand means the company has “no need for ‘safety stock’ inventory,” added Bragg.

And Terry Esper, an Ohio State University logistic professor, said retailers now have a better ability predict shopper demand, allowing them to hold leaner inventories as spending growth moderates and supply-chain disruptions decrease.

“Retailers have more confidence in the overall supply chain and the logistics network and the environment, and as a result, they’re saying, ‘Hey, I think we’re at a point now where we’re safe to go back to just-in-time,’” Esper said.

The report notes retailers like Walmart have employed technology designed to fix forecasting tools that were broken during the pandemic to better understand consumers’ buying habits and predict demand.

The tech lets companies “have smaller, more accurate shipments than they have in the past,” said Rob Handfield, a North Carolina State University supply chain management professor.

Among the technologies retailers can use to improve their inventory management are artificial intelligence (AI)-powered tools, as PYMNTS wrote last year.

“AI-powered predictive analytics, for example, can optimize inventory management and reduce the risk of overstocking or understocking,” that report said. “By analyzing consumer data and sales trends, predictive analytics algorithms can also forecast demand for specific products, allowing brands to adjust inventory levels accordingly.”

Meanwhile, PYMNTS spoke earlier this week with Akash Gupta, CEO of warehouse fulfillment solutions firm GreyOrange, who said this critical area of commerce still has a long way to go in terms of efficiency.

“We’re still in the very early stages,” Gupta told PYMNTS Monday (Jan. 22), of the effort to meet consumer demands in real time.

Just 10% to 15% of warehouses, he said, have mechanized at least part of their processes, while far fewer might be considered heavily automated.

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